Top Spine Surgeons Reap Royalties, Medicare Bounty

Norton Hospital in Louisville, Ky., may not be a household name nationally. But five senior spine surgeons have helped put it on the map in at least one category: From 2004 to 2008, Norton performed the third-most spinal fusions on Medicare patients in the country.

The five surgeons are also among the largest recipients nationwide of payments from medical-device giant Medtronic Inc. In the first nine months of this year alone, the surgeons—Steven Glassman, Mitchell Campbell, John Johnson, John Dimar and Rolando Puno—received more than $7 million from the Fridley, Minn., company.

Medtronic and the surgeons say the payments are mostly royalties they earned for helping the company design one of its best-selling spine products.

Corporate whistleblowers and congressional critics contend such arrangements—which are common in orthopedic surgery—amount to kickbacks to stoke sales of medical devices. They argue that the overuse of surgical hardware ranging from heart stents to artificial hips is a big factor behind the soaring costs of Medicare, the government medical-insurance system for the elderly and disabled.

Medtronic says it can't develop new medical products that improve patients' lives without the help of surgeons. It says the royalties it pays them are legitimate but it doesn't give detailed information about what intellectual property each recipient contributes. It says it doesn't pay its collaborating surgeons royalties on the devices they personally use in their patients, removing any financial incentive for them to do more surgeries than necessary.

Norton's Dr. Glassman cited this policy as a safeguard against any conflict of interest and said the royalties he and his colleagues receive are "legitimate." He added that they inform their patients of their financial ties with Medtronic. Norton Hospital said it has policies "to prevent direct conflicts of interest." The other Norton surgeons didn't respond to requests for comment put to them through Norton and Dr. Glassman.

Using a Medicare database that tracks hospitals' billing, The Wall Street Journal was able to ascertain that Norton is among the most aggressive practitioners of spinal fusion in the country.

Spinal fusion has become one of medicine's most controversial procedures. It involves fusing together two or more vertebrae to alleviate back pain, usually with the help of metal plates, rods and screws implanted in the patient's back. Tens of thousands of dollars of hardware can go into a single surgery.

Medtronic is the biggest maker of spinal implants. Last year, its spine business generated world-wide sales of $3.5 billion, accounting for half of the roughly $7 billion spinal-implant market.

Conservative spine surgeons argue that a spinal fusion is appropriate only for a small number of conditions, such as spinal instability, spinal fracture or a severe curvature of the spine known as scoliosis, and that financial incentives have caused the procedure to become overused. Others say it's a useful tool to treat patients who have debilitating back pain and have tried other options like physical therapy to no avail.

The Journal consulted several experts to determine which back conditions are commonly thought to require a fusion and which are subject to the most debate. The most hotly debated use of spinal fusion surgery centers on patients who merely suffer from aging disks, a condition known as degenerative disk disease.

One health insurer, the nonprofit Blue Cross and Blue Shield of North Carolina, announced in September that it would stop paying for spine fusions performed on such patients beginning on Jan. 1. The insurer said that the procedures are "considered not medically necessary."

The Journal mined hospitals' Medicare claims to see what proportion of fusions performed fall in this category. Due to a three-decade-old court ruling guarding the confidentiality of physician information, the paper is barred from disclosing what it found regarding the five Norton surgeons.

Critics of the court ruling and of the privacy policies of the federal Medicare program argue that making such information public would help taxpayers understand where their money is going, and potentially deter abusive or wasteful practices.

But the Journal is permitted to disclose its findings for Norton Hospital as a whole, where 27 surgeons performed one or more spine fusions in 2008.

At Norton, spinal fusions on patients who only suffered from aging disks accounted for 24% of the 2,475 fusions the hospital performed for Medicare between 2004 and 2008, compared with 17% nationally. This placed it 11th in percentage terms out of 60 hospitals that performed 1,000 or more spine fusions in those years, and fourth in raw count. Norton ranked third nationally in the overall numbers of spine-fusion surgeries.

In emailed responses to questions, Dr. Glassman said he and his four colleagues "do not overuse spine fusion procedures," and argued that the diagnostic codes the Journal based its analysis on "do not convey indication for spinal fusion with the specificity that you are attributing to this data."